After a long career at Barron's, I joined Forbes as San Francisco bureau chief in December 2010. I've been writing about technology and investing for more than 25 years. With the Tech Trade, I've picked up where I left off when I was writing the Tech Trader Daily blog at Barrons.com. When I'm not working, you can find me riding my road bike around the Bay Area hills, managing my fantasy baseball team, rooting for my beloved Phillies and Eagles and hanging out in the Valley with my family. You can follow me on Facebook, on Twitter (@savitz), and on Google+.

Will HP Sell Its PC Business? Update: HP Indiciates It Won't

Hewlett-Packard (HPQ) is considering selling its PC business, with Samsung the most likely buyer, DigiTimes reports, citing a report in the Chinese-language Commercial Times. However, the story added that sources in the component industry say rumors about such a deal have been circulating in Taiwan since Q4 2010, and that a deal “was called off due to an unknown reason.” Update: And HP is denying the story, see below.

DigiTimes says its sources find the possibility of HP getting out of PCs “rather low,” noting that it is still the largest global notebook vendor.

HP isn’t commenting.

Other potential buyers, the story notes, include Lenovo, which a few years ago bought IBM’s laptop business, and Foxconn Electronics, the large contract manufacturer.

I’d note that selling the PC business would follow in the footsteps of IBM, which over the years has shed many of its hardware businesses – including PCs and disk drives – and refocused on software and services. Under new CEO Leo Apotheker, HP likewise is expected to make a big push into software. A move to shed the PC business would be a complete reversal of the company’s strategy under former CEO Carly Fiorina, who bulked up HP’s PC business with the acquisition of Compaq 10 years ago.

Update: In a research note, Barclays Capital analyst Ben Reitzes writes today that while HP is unlikely to sell the PC business, such a move “would be a positive event given persistent secular threats in PCs.” He adds that he “wouldn’t be surprise if there was some pressure from investors and some new thinking from a new board of directors which would lead the company to evaluate all options, including the sale of the PC business.” He notes that if you removed the PC business from the company’s results for FY 2010, gross margin would jump from 23.9% to over 30%.

Update 2: HP has now issued a statement about the Commercial Times story. “”Irresponsible reporting by Taiwan’s Commercial Times, suggesting that HP might sell its PC business, should be dismissed as market rumor and speculation. HP runs the world’s largest PC business and it is core to HP’s strategy for the connected world.”

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